Tesla Motors: Macro and Micro Environmental Analysis Report

This report provides a comprehensive analysis of Tesla Motors, examining its macro and micro environments, SWOT analysis, and organizational strategies. The report begins with a PESTEL analysis of the macro environment, considering political, economic, social, technological, environmental, and legal factors. It then delves into the micro-environment, exploring opportunities, threats, and other influencing factors. The internal environment is assessed through a SWOT analysis, focusing on strengths, weaknesses, and ethical standards. Finally, the report discusses Tesla's past, present, and future strategies. The report also covers topics like technological advancements, governmental incentives, economic factors, social trends, and legal regulations. The report provides insights into Tesla's market position, competitive advantages, and overall business performance. The report also has a detailed analysis of the manufacturing facility and its disruptive technology and human resource management, workplace ethics and standards.

Running head: TESLA MOTORS PROGRESSIVE ASSIGNMENT REPORT
TESLA MOTORS PROGRESSIVE ASSIGNMENT REPORT
Name of the Student
Name of the University
Author Note

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EXECUTIVE SUMMARY
The following paper attempted an overall discussion of the marketing strategies that have been
employed by the company under perusal, Tesla Motors. The paper has been subdivided into four
parts that dealt with the analysis of the internal and the external environments of the company as
well as the organizational structure that is observed to have been maintained by the concerned
organization. The paper opened with the macro environmental analysis of the company. In this
section, the paper presented an analysis of the external factors that have been affecting the
business through the implementation of the PESTEL model. The model analyzed the
performance of the company on the basis of the political, economic, social, technological,
environmental and the legal factors that have been affecting the organizational performance of
Tesla Motors. The second part of the paper attempted a discussion on the micro-environmental
factors that have been affecting the company. The second part of the paper discusses the
opportunities and the threats that had been faced by the company as well as the other factors that
have been influencing the performance of the company in discussion, Tesla Motors. The paper
proceeded to the third part with the discussion on the internal environment within Tesla. This
part had put forth the SWOT analysis of the company. The third part further focused on the
manufacturing facility and the disruptive technology that has been implemented within the
company as well as on the ethical standards that are maintained by the human resource
department of the company. The fourth part of the report discussed the strategy that had been
implemented by the organization in discussion, Tesla Motors. The fourth part shed light on the
past, the present and the future strategies of the organization. The paper finally ends with a
summarization of the entire paper.

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Table of Contents
Part 1 – Macro Environment................................................................................................4
Introduction......................................................................................................................4
Political factors............................................................................................................4
Economic factors.........................................................................................................4
Social factors...............................................................................................................5
Technological factors...................................................................................................6
Legal factors................................................................................................................7
Environment factors.....................................................................................................8
Conclusion.......................................................................................................................9
Part 2 – Micro Environment................................................................................................9
Introduction......................................................................................................................9
Micro Environment Analysis.....................................................................................10
Summary........................................................................................................................14
Part 3 – Internal Environment............................................................................................14
Introduction....................................................................................................................14
SWOT analysis of Tesla Motors Company...................................................................15
Strength......................................................................................................................15
Weaknesses................................................................................................................16
Business opportunities for Tesla Motors...................................................................17

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Threats in the business of Tesla Motors....................................................................17
The manufacturing facility and its disruptive Technology............................................18
HRM and workplace ethics and Standards....................................................................19
Conclusion.....................................................................................................................19
Part 4 – Organization Strategy...........................................................................................20
Introduction....................................................................................................................20
Organizational Strategy of Tesla Motors.......................................................................20
Past Strategy..............................................................................................................21
Present Strategy.........................................................................................................22
Future Strategy...........................................................................................................24
Conclusion.....................................................................................................................25
Conclusion.........................................................................................................................25
References..........................................................................................................................26

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Part 1 – Macro Environment
Introduction
Automotive world is very competitive with a lot of options, and Tesla has been
recognized for its electric currently with no-emission cars and good value. Founded in 2003 by
Elon Musk, Tesla is improving fast its own cars and getting attention of the market.
Political factors
The governments around the globe are trying to persuade drivers to swap their standard
vehicles to eco-friendly types to stop or minimise pollution in their countries. That is caused by
Paris Agreement to battle climate change which is forcing governments to take different
approach and accelerate sales of eco-friendly vehicles. Many countries around the globe are
providing governmental incentives for electrical plug-in and hybrid vehicles. Incentives varies
from states and countries you are willing to purchase a car which could provide potential
customers with variable tax exemptions, tax credits, grants and even tolls and parking discounts.
In United Kingdom, customers will be eligible to get £3500 as a grant towards new electrical or
hybrid vehicle and exemption from London Congestion Charge. In United States of America
government incentives in form of Credit Tax varies throughout the states with lowest in New
York 500$ towards new plug-in car, and highest in Colorado- 5000$, as well as Federal Tax
Credit of 7500$ which going to decrease in oncoming year to 3750$. For example, in California
all Tesla vehicles are considered as Clean Air Vehicle, which is allowing drivers to use high
occupancy vehicle lanes even if it is no other passengers excluding the driver (Tesla.com 2019).

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Economic factors
Economic factors provide a positive or negative economic external impact over a
company’s macro environment (Kissinger 2018). Global economic growth cost of materials and
disposable income are few of the important factors that influence Tesla’s business performance.
In 2018 Autovista Group stated that as a result of world the economic growth, sales of electric
vehicles increased considerable. International Energy Agency reported in 2018 Tesla sale
acceleration from 1.1 million units in 2017 to 3.7 million in 2018 and a projection to 13 million
by 2020 (Tesla.com 2019). As a result, investors turned their attention to lithium-ion batteries
production. Due to the higher output volume, the cost of the batteries decreased accordingly
(Union of Concerned Scientists 2018). With all these glamorous aspects, Tesla still continues to
be classified as an expensive vehicle, with its price range between $49,000 (Assis 2018) and
$145,000 (Thomson 2017) comparing customers annual discretionary income (Investopedia,
2018) that ranges between $15,436 in Mexico and 46900$ in USA (OECD, 2018). In these
conditions, the next challenge for Tesla’s CEO, Musk is to produce a car that doesn't price itself
into the luxury category (Zetlin 2018), an affordable similar to Model 3 that is projected to cost
$35000 (Pratap 2017). Following the latest reports, Tesla enjoys a leading market position with a
high demand. However, in order to maintain its growth and market competitiveness the company
needs to continuously develop new up up-to date products at an affordable price that meet
customers’ requirements.
Social factors
To increase popularity of fuel free lifestyle Tesla has introduced private house electricity
storage systems that could be connected to solar panels, wind turbines, can be used as a backup
power and to charge electric car. This storage system is called Powerwall and Tesla deployed

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same system with solar panels to power California main grid line. Tesla battery Gigafactory in
Nevada is powered with a 70MW of solar array and has on site recycling (Tesla.com 2019).
Freemont California grid is using 70% non-fossil electricity. Tesla have good recycling practices
of lithium ion batteries and have plans to improve it by recycling on site to lower the impact on
environment. Tesla are leaders in material composition of lithium ion batteries, high energy
densities and clean energy used in production. Their vision of renewable energy and other
aspects of cleaner environment making them the best option for customers who are willing to
make an impact on environment not only by purchasing eco friendly cars, but also by upgrading
house.
Technological factors
Technological factors provide valuable information regarding the impact of technological
development over a company’s micro-environment (Kissinger 2018). In the latest time, as a
result of progress in technology and fast globalization, the vehicle industry expanded
considerably and has been moving towards automation. Tesla has been one of the innovative
companies that embraced this hi-tech evolution. Its aim is to grow the world’s changeover to
sustainable energy and zero-emission future (Tesla 2018). According to Matheus (2017), Tesla
was classified in the highest rank on BrandZ's Top 10 Most Innovative U.S. Brands last 2017,
due to energy transition vehicles, cutting edge technology, and low carbon footprint. There are
few important innovative products developed by Tesla that deserves to be mentioned:
 High performance batteries of the current electrical vehicles that can be charged within
minutes.
 Electric trucks (“Tesla Semi”), with the capability to drive 500 miles with a single charge
(Tesla.com 2019).

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 Mega-charger stations – with the ability to charge a battery in 30 minutes.
 Full self-driving hardware with full self-driving functionality.
 Online mobile systems that can upgrade vehicles software.
Not lastly should be mentioned Tesla’s implication in producing of solar panels, full solar
roofing and “Powerwall” - home batteries systems, with the property of storing solar energy
(Investopedia 2018). Tesla’s business is built upon technology - a critical determinant of its sales
and profitability. The technology is undoubtedly the greatest factor that has an impact Tesla’s
business – from production to marketing.
Legal factors
Legal factors are vital in every company life affecting businesses. Tesla legal factors
determine the effect of existing legal and regulatory framework, law, on the macro environment.
Therefore, our analysed company, Tesla business developments and manager decisions are
influenced by actual legal system. Tesla’s business management, internal policies human
resource management, business partnerships etc. must to be within the scope of the law.
The company long term visions include lot of external factors, among them legal factors,
such as: regulations for energy consumption, dealership sales and one of the most important for
Tesla Motors is to expand the international patent protection. Tesla is expanding into
international markets and keeping up-to-date on their international patents. Also, since the car
focuses on eco-friendliness, they can promote their cars as energy efficient and ensure it abides
by international environmental regulations.
Legal factors could identify the opportunity to facilitate, promote products, in our case,
Tesla´s electric cars and solutions for products based on energy consumption regulation that

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customers need to follow. Moreover, identifying these factors their business has opportunity to
become larger and larger by direct sales and not the least by dealership. This external factor
could be also a threat that is why Tesla had patented many of its technology out of fear that other
renowned companies in car manufacturing would take advantage of company progresses.
Environment factors
In 2010 Tesla Motors has received from Global Green USA the ‘Environmental
Leadership’ Award relating the word’s first all-electric as recognizing for innovative use of
sustainable product design. Tesla is related to macro-environment or remote of the vehicles
industry, as generation and storage energies. Almost all is concern to the effects of ecological
situations and Tesla has opportunities to show its electric vehicles thinking for example of
climate changing, environmental systems and better way of waste disposal. Their electric
vehicles, batteries and solar panels are matching to help for low-carbon lifestyles and renewable
energy. Some of external factors are pointed to business with sustainability and environmentally
suitable products and therefore macro-environment present opportunities for global expansion
towards a world sustainable and secure future. The most important factors are:
 Increasing popularity of low-carbon lifestyles
 Stimulating the preference for renewable energy
 Making a better way of distribution in developing markets
Electric cars would reduce carbon dioxide emissions as they produce fewer greenhouse
gases. Electric don't produce toxic waste with heavy metals, poisonous substances or need
oil/filter changes as gasoline cars. If a hybrid’s battery runs low the electric, starts an engine with
battery power as extra boost. Hybrid electric cars can use power from a normal electric grid as
from solar and wind power stations and from hydroelectric generators as these cars avoid the use

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of coal-burning power. However less ozone pollution, consumption of water or use of steel and
cooper material will help to combat global warming and can bring a healthy environment.
Conclusion
Tesla Motors is a renowned company for its technologically innovative vehicles and also
for their energy products. It is one of the world leader companies that work for a greener and
more technologically efficient world. They manufacture fully electric cars with high class
technology, hence their sales growing fast. Operating in global environment, they are facing lot
of challenges, Tesla is subject to the effect of external forces which was analysed Pestle in this
essay.
Part 2 – Micro Environment
Introduction
The engineers Martin Eberhard and Marc Tarpenning founded the company Tesla Motors
in the year 2003. The company is engaged in the manufacture of electric vehicles, and clean
energy generation and storage products (Tesla, 2018). The company is originally based at
California, having business operations around the globe. The environmental analysis of the
company refers to the overall evaluation of the external and internal factors that affect the
various business operations of the entity. A number of techniques have been prescribed over the
years that aid in the conduct of the environmental analysis of the entity.
The following report is aimed at investigating the microenvironment factors that affect
the business of the Tesla, as part of the environmental analysis of the company. The report will
explore the threats and opportunities faced by the entity as prescribed in the SWOT Analysis

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technique. This would be in addition to the evaluation of the external environment factors that
play a key role in influencing the business. The report will also consider the elements of the
Porters Five Forces’ analysis, and finally conclude on the same.
Micro Environment Analysis
The micro environment analysis of an entity refers to the evaluation of the internal factors
that influence the decision making, performance and the overall strategies of the business
operations. The micro environment factors include the customers, suppliers, employees,
competitors, shareholders and the media.
One of the techniques to evaluate the internal factors governing a company, is SWOT
analysis that comprises the evaluation of strength and weaknesses of the entity. In addition, the
technique states that in order to evaluate the micro environment of the company, it is also
essential to evaluate the opportunities and threats to the business.
The analysis of the opportunities and threats of the business of the Tesla Motors is
presented as follows.
Opportunities for the company
 One of the major opportunities for the company Tesla as in the industry of electric cars is
that the crude oil prices are consistently on the rise. As the crude oil prices are
consistently on the rise, the competitors would find it difficult to maintain the cost. In
addition, the rising oil and petrol price directly impact the interests and the buying
capacity of the customers as well. The same is an opportunity for Tesla to consistently
engage in the research and development to capitalise the opportunity arising from the
rising petrol and diesel prices.

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 Another opportunity for the company can be stated that the company is yet to expand its
business operations in the emerging markets of the Asia Pacific like that of India. The
emerging markets of Asia Pacific are yet to be introduced with the energy run vehicles
and devices. The markets of India are covered by the competitors like Maruti Suzuki,
GM, Ford and others. The opportunity lies for the Tesla to grab and convert the lower
market share to its benefit.
 Another opportunity for Tesla lies in the fact that the electric vehicles marker is further
divided into various segments such as the road vehicles, underwater vessels, electric
spacecraft, rail vehicles, electric aircrafts and more. Thus, as the company has already
launched its home battery product, the Tesla Powerwall, it is one of the only companies
in the world that is engaged in the residential energy storage market. Thus, the company
can further introduce its products and diversify in the area of rail vehicle market, aircrafts
and such other than road markets.
Threats for the company
 One of the major emerging threats for the company is that the competitor Volkswagen
AG has also launched its own charging and electricity unit (Sachgau, 2019). This will not
only make the Volkswagen battery operated cars more attractive to the customers, but
would also pose competition for the Tesla in the energy services market.
 Another threat to the company is that the competitors like Porsche have already jumped
into the area of electric vehicle. As per the reports, the customers have already started
showing interests in the form of pre booking for the Taycan, the first electric vehicle
product of Porsche (Business Insider, 2019).